Advanced Search

Monthly Statistical Bulletin Dec 1998

 MONTHLY BULLETIN - DECEMBER 1998

CONTENTS

 

Highlights

Money Market Developments

Reserve Money

Monetary Aggregates

Money Market Operations

Bank Rate

Secondary Market Transactions

Interbank Money Market

Commercial Banking Sector Developments

Main Features

Interest Rate Structure

Cash Ratio

Inward and Outward Remittances

Offshore Banking Sector Developments

Foreign Exchange Market

International Foreign Exchange Market Review

Interbank Foreign Exchange Market Review

Exchange Rate of the Rupee

Bank of Mauritius Foreign Exchange Reserves

Net International Reserves of Mauritius

Appendices

Bank of Mauritius Statement of Assets and Liabilities as at 31 December 1998

Consolidated Statement of Assets and Liabilities of Commercial Banks as at end November 1998

Commercial Banks' Consolidated Statement of Sector-wise Distribution of Credit to the Private Sector as at end November 1998

Communiqué

Banks and Non-bank Deposit-taking Institutions

Over the Counter Sale of Government of Mauritius Treasury Bills

Issue of Government of Mauritius Treasury Bills to Fund Managers

Address by R. Basant Roi, Governor of Bank of Mauritius at the Bank of Mauritius Annual Dinner with the Private Sector

Appointment

HIGHLIGHTS

 

November 1998
 

  •  Domestic credit increased by Rs862 million to Rs73,423 million.
  •  Commercial banks' credit to the private sector expanded by Rs1,019 million to Rs54,574 million.
  •  Money supply, M2, rose by Rs293 million to Rs72,994 million.
  • Reserve money declined by Rs402 million to Rs9,247 million.
  • Total deposits with commercial banks rose by Rs333 million to Rs68,199 million.
  •  Commercial banks' weighted average rate of interest on term deposits was 9.32 per cent and their weighted average lending rate was 13.74 per cent.
  •  Commercial banks' net payments of foreign exchange amounted to an equivalent of Rs1,599 million. Sales of US dollar by Bank of Mauritius to commercial banks through intervention on the interbank foreign exchange market amounted to an equivalent of Rs613 million. Direct sales of foreign currencies by the Mauritius Sugar Syndicate to commercial banks amounted to an equivalent of Rs817 million.

 
 

December 1998

 

  • Bank of Mauritius stated selling, on a first-come first-served basis, Government of Mauritius Treasury Bills over the counter to individuals and non-financial institutions.
  • Bank Rate varied between 11.93 per cent and 12.81 per cent.
  • Treasury Bills sold on the primary market amounted to Rs4,087 million.
  • The volume of Bills traded on the secondary market was Rs1,635 million.
  • Transactions on the interbank money market amounted to Rs3,384 million, or a daily average amount of Rs117 million.
  • Transactions on the interbank foreign exchange market amounted to an equivalent of US$12.8 million.
  • Bank of Mauritius sold US$5.0 million to commercial banks through intervention on the interbank foreign exchange market.
  • Direct sales of foreign currencies by the Mauritius Sugar Syndicate to the banking sector amounted to US$24.5 million.
  • The foreign exchange reserves of Bank of Mauritius increased by Rs1,209 million to Rs13,867 million.Net international reserves of the country went up by Rs1,954 million to Rs19,894 million.

 

MONEY MARKET DEVELOPMENTS

 

Reserve Money

Reserve money fell by Rs402 million or by 4.2 per cent, from Rs9,649 million at the end of October 1998 to Rs9,247 million at the end of November 1998.

Currency with public decreased marginally by Rs33 million or by 0.7 per cent to Rs4,972 million while currency with banks increased by Rs416 million or by 28.7 per cent to Rs1,865 million. Demand deposits with Bank of Mauritius declined by Rs785 million or by 24.6 per cent to Rs2,410 million.

 

Table 1: Components and Sources of Reserve Money

(End of Period) (Rs million)
 
 
 

 

Nov-98

Oct-98

Sep-98

Aug-98

Jul-98

Jun-98

             

Components of Reserve Money

           
             

1. Currency with Public

4,972

5,005

4,812

4,837

4,787

4,651

2. Currency with Banks

1,865

1,449

1,456

1,425

1,331

1,384

3. Demand Deposits with Bank of Mauritius

2,410

3,195

2,436

2,620

2,784

2,547

             

Reserve Money (1+2+3)

9,247

9,649

8,704

8,882

8,902

8,582

             

Sources of Reserve Money

           
             

1. Net Foreign Assets of BoM

12,658

12,780

14,121

14,038

14,131

14,869

2. Net BoM Credit to Government

5,254

5,188

3,118

3,465

3,749

2,319

3. BoM Credit to Non-Bank Financial Institutions

574

577

530

528

521

476

4. Net Non-Monetary Liabilities 

9,239

8,896

9,065

9,149

9,499

9,082

             

Reserve Money (1+2+3-4)

9,247

9,649

8,704

8,882

8,902

8,582

             

Broad Money Multiplier @

7.9

7.5

8.3

7.9

7.9

8.3

@Defined as the ratio of Broad Money to Reserve Money.

Figures may not agree with Table 2.

 

Monetary Aggregates

Net foreign assets of the banking system increased marginally by Rs119 million or by 0.7 per cent to Rs17,700 million at the end of November 1998. Net foreign assets of Bank of Mauritius decreased by Rs122 million or by 1.0 per cent to Rs12,658 million where as net foreign assets of commercial banks went up by Rs241 million or by 5.0 per cent to Rs5,042 million.

Domestic credit rose by Rs862 million or by 1.2 per cent to Rs73,423 million. Net credit to Government fell by Rs154 million or by 0.8 per cent to Rs18,275 million while credit to the private sector rose by Rs1,016 million or by 1.9 per cent to Rs55,148 million.

Money supply (M2) went up by Rs293 million or by 0.4 per cent to Rs72,994 million. Narrow money (M1) went down by Rs154 million or by 1.4 per cent to Rs10,504 million while quasi-money increased by Rs447 million or by 0.7 per cent to Rs62,490 million. The fall in M1 was brought about by decreases of Rs121 million or of 2.1 per cent and of Rs33 million or of 0.7 per cent in currency with public. The rise in quasi-money was accounted for by increases of Rs180 million or of 0.6 per cent in savings deposits, Rs170 million or of 0.6 per cent in time deposits and Rs97 million or of 1.7 per cent in foreign currency deposits.

 

Money Market Operations

As from December 1998, Bank of Mauritius started the auctioning of Treasury Bills with 30 days maturity. Bank Rate is now determined on the basis of the overall weighted yield on Bills with maturities of 30, 91, 182 and 364 days only.

During the five auctions held in December 1998, the total amount of Treasury Bills put on tender was Rs5,500 million. The value of bids received amounted to Rs4,700 million and the value of bids accepted was Rs4,087 million. Maturing Bills amounted to Rs2,979 million.

The overall weighted average yield on Bills went up by 91 basis points, from 11.67 per cent in November 1998 to 12.58 per cent in December 1998. The weighted average yield on 30-day Bills was 12.51 per cent in December 1998. For the 91-day and 182-day Bills, the weighted average yields increased by 56 basis points and 105 basis points to 12.16 per cent and 12.89 per cent, respectively. The weighted average yield on 364-day Bills increased by 114 basis points to 12.88 per cent while for the 728-day Bills, it went up by 105 basis points to 13.05 per cent.

In December 1998, participants in the primary bill market continued to maintain a preference for 91-day Bills, which represented 39.5 per cent of total bids received. The non-bank sector was more active in bidding in the primary bill market, with its share in total bids received increasing from 52.2 per cent in November 1998 to 64.5 per cent in December 1998.

Table 2: Components and Sources of Broad Money (M2)

(End of Period) (Rs million)
 
 
 

 

Nov-98

Oct-98

Sep-98

Aug-98

Jul-98

Jun-98

             

Components of Broad Money

           
             

1. Currency with Public

4,972

5,005

4,812

4,837

4,787

4,651

2. Demand Deposits with the Banking System

5,532

5,653

5,966

5,024

4,950

5,501

I. Narrow Money, M1 (1+2)

10,504

10,658

10,778

9,861

9,737

10,152

             

1. Savings Deposits

29,601

29,421

29,400

29,157

28,625

28,244

2. Time Deposits

27,100

26,930

26,284

26,349

26,499

26,234

3. Foreign Currency Deposits

5,789

5,692

5,613

5,213

5,159

6,248

II. Quasi-Money (1+2+3)

62,490

62,043

61,297

60,719

60,283

60,726

             

Broad Money, M2 (I+II)

72,994

72,701

72,075

70,580

70,020

70,878

             

Sources of Broad Money

           
             

1. Bank of Mauritius

12,658

12,780

14,121

14,038

14,131

14,869

2. Commercial Banks

5,042

4,801

5,245

4,637

4,774

6,249

I. Net Foreign Assets (1+2)

17,700

17,581

19,366

18,675

18,905

21,118

             

1. Bank of Mauritius

5,388

5,322

3,252

3,599

3,883

2,453

2. Commercial Banks

12,887

13,107

14,361

14,077

14,198

14,905

A. Net Credit to the Central Government (1+2)

18,275

18,429

17,613

17,676

18,081

17,358

             

1. Bank of Mauritius

574

577

530

528

521

476

2. Commercial Banks

54,574

53,555

52,063

51,300

50,313

49,386

B. Credit to the Private Sector (1+2)

55,148

54,132

52,593

51,828

50,834

49,862

             

II. Domestic Credit (A+B)

73,423

72,561

70,206

69,504

68,915

67,220

             

III. Net Non-Monetary Liabilities

18,129

17,441

17,497

17,599

17,800

17,460

             

Broad Money, M2 (I+II-III)

72,994

72,701

72,075

70,580

70,020

70,878

             

 

 

 

Table 3: Auctions of Treasury Bills

(Rs million)
 
 
 

   

Auctions Held on

     

Total

   

03-Dec-98

10-Dec-98

17-Dec-98

24-Dec-98

30-Dec-98

Dec-98

Nov-98

                 

1.

Amount of Bills Put on Tender 

1,000

600

800

2,000

1,100

5,500

3,200

2.

Value of Bids Received

373

618

942

1,438

1,329

4,700

2,099

3.

Value of Bids Accepted

371

412

800

1,404

1,100

4,087

2,099

4.

Value of Bills Maturing*

640

595

468

1,276

-

2,979

3,079

5.

Net Issue of Bills (3-4)

-269

-183

332

128

1,100

1,108

-980

                 

*: As on the day following auction day, except for 24 December 1998 when out of Rs1,276 million value of Bills an amount of Rs1,193 million matured on 28 December 1998.

 

 

 

Table 4: Bank Rate and Weighted Average Yields on Treasury Bills

(Per cent per annum)
 
 
 

Auctions Held on

   

03-Dec-98

10-Dec-98

17-Dec-98

24-Dec-98

30-Dec-98

             

1.

Weighted Yield on:

         
 

30-day

12.17

12.41

12.66

12.79

12.54

 

91-day

12.32

12.58

12.83

11.85

12.75

 

182-day

12.62

12.89

12.94

12.96

12.76

 

364-day

12.20

12.83

12.89

13.00

12.85

 

728-day

-

-

-

13.03

13.05

2.

Overall Weighted Average Yield

12.34

12.59

12.81

12.19

12.99

3.

Bank Rate*

12.34

12.59

12.81

12.19

-

             

*: Effective on the following day, except for 24 December 1998 when Bank Rate became effective on 28 December 1998 and remained at 12.19 per cent up to 3 January 1999.

Bank Rate is determined on the basis of overall weighted average yield on Bills with maturities of 30, 91, 182 and 364 days only.

 

 

Table 5: Auctions of Treasury Bills - Maturity-wise

(Rs million)
 
 
 

 

Dec-98

Nov-98

Oct-98

Sep-98

Aug-98

Jul-98

Jun-98

May-98

Apr-98

                   

Amount put on Tender

5,500

3,200

5,800

3,600

3,600

5,400

5,300

2,800

3,750

Total Bids Received

4,700

2,099

4,292

3,373

2,592

4,676

3,118

2,276

2,911

30-day

799

               

91-day

1,857

1,296

2,790

1,930

1,574

3,238

1,378

1,404

2,076

182-day

871

395

744

455

307

406

951

549

525

364-day

335

403

320

175

100

195

789

323

310

728-day

838

5

438

813

611

837

     

Total Bills Sold

4,087

2,099

4,282

3,049

2,592

4,574

3,113

2,086

2,667

30-day

605

               

91-day

1,591

1,296

2,780

1,696

1,574

3,146

1,378

1,297

1,929

182-day

747

395

744

442

307

396

951

484

467

364-day

323

403

320

149

100

195

784

304

271

728-day

821

5

438

762

611

837

     

Weighted Average Yield

                 

(Per cent)

                 

30-day

12.51

               

91-day

12.16

11.60

10.41

10.17

9.73

9.33

9.15

9.10

9.09

182-day

12.89

11.84

10.91

10.14

9.72

9.16

9.04

9.05

9.04

364-day

12.88

11.74

11.06

10.11

9.75

9.15

9.02

9.04

9.04

728-day

13.05

12.00

11.14

10.86

10.62

10.50

     

Overall Weighted Yield

12.58

11.67

10.62

10.34

9.94

9.52

9.08

9.08

9.08

(Per cent)

                 

Note: Figures may not add up to total due to rounding.

Auction of 30-day and 728-day Treasury Bills started as from December and July 1998, respectively.

 

http://www.bom.mu/pdf/Research_and_Publications/Monthly_Statistical_Bulletin/Dec1998/Image120.gif

Chart 1: Weighted Average Yields on 91-day, 182-day and 364-day Treasury Bills

Bank Rate

In December 1998, Bank Rate fluctuated within a range of 11.93-12.81 per cent as compared to a range of 10.71-11.93 per cent in November 1998.

The volatility of Bank Rate, as measured by its coefficient of variation, declined from 2.74 per cent in November 1998 to 2.30 per cent in December 1998.

The 3-month moving average Bank Rate rose by 60 basis points from 10.03 per cent in October 1998 to 10.63 per cent in November 1998 while the 3-month moving average inflation rate went up by 33 basis points to 6.13 per cent in November 1998.

http://www.bom.mu/pdf/Research_and_Publications/Monthly_Statistical_Bulletin/Dec1998/Image123.gif

 

Chart 2: Weekly Movements of Bank Rate (June 1998 through December 1998)

 

http://www.bom.mu/pdf/Research_and_Publications/Monthly_Statistical_Bulletin/Dec1998/Image124.gif

Chart 3: Movements of 3-Month Moving Average Bank Rate and 3-Month Moving Average Inflation Rate (November 1997 through November 1998)

Secondary Bill Market

The volume of transactions on the secondary market for Bills was lower by Rs124 million, from Rs1,759 million in November 1998 to Rs1,635 million in December 1998.The volume of Treasury Bills transacted outside the Secondary Market Cell amounted to Rs55 million in December 1998 as compared to Rs128 million in November 1998.

Bank of Mauritius started selling, on a first-come first-served basis, Government of Mauritius Treasury Bills over the counter to individuals and non-financial corporations in December 1998.

The total amount of Bills sold by the Secondary Market Cell during December 1998, inclusive of Over The Counter sale (OTC) sale, was Rs915 million as compared to Rs476 million in November 1998.

 

Table 6: Transactions on the Secondary Market

 
 

 

Amount of

Amount of

Amount of

Total

Weighted

 

Bills 

Bills taken

Bills

Volume of

average

 

transacted

up and 

sold by

Secondary

yield

 

outside

purchased

SMC*

Market

to 

 

SMC

by SMC

 

Transactions

buyer**

 

(Rs million)

(% p.a.)

           

December 1998

         

Wk V

-

-

204 

204 

12.77

Wk IV

-

596 

149 

745 

12.53

Wk III

35 

69 

193 

297 

12.41

Wk II

20 

-

255 

275 

12.39

Wk I

-

-

114 

114 

11.63

Dec-98

55 

665 

915 

1,635 

12.41

Nov-98

128 

1,155 

476 

1,759 

11.31

*: Includes Bills sold Over The Counter (OTC).

**: Excludes Bills taken and purchased by SMC.
 

 

Interbank Money Market

The volume of transactions on the interbank money market went up from Rs3,362 million in November 1998 to Rs3,384 million in December 1998. Consequently, the daily average amount of transactions increased from Rs112 million to Rs117 million over the same period.

Interbank interest rates varied within a range of 8.50-12.19 per cent in December 1998 as compared to a range of 8.00-11.00 per cent in November 1998. The weighted average interbank interest rate decreased from 10.14 per cent to 9.82 per cent over the same period.

 

Table 7: Interbank Transactions - January 1998 through December 1998

 
 
 

Period

Amount Transacted

Daily

Range of

Interbank

Bank 

       

Average

Interbank 

W.A.I

Rate

 

Lowest

Highest

Total

@

Rate 

Rate*

**

 

(Rs million)

(Per cent)

               

December 1998 #

             

Week V

164

450

1,124

281

9.50 - 12.19

10.10

12.19

Week IV

60

240

1,160

116

9.00 - 11.00

10.06

12.81

Week III

30

30

150

30

9.5

9.50

12.59

Week II

30

120

520

74

8.50 - 9.50

9.19

12.34

Week I

21

207

430

143

8.50 - 11.00

9.27

11.93

               

December 1998

21

450

3,384

117

8.50 - 12.19

9.82

12.37

November 

7

290

3,362

112

8.00 - 11.00

10.14

11.47

October

15

495

4,220

136

8.00 - 18.00

10.37

11.35

September 

8

158

725

30

8.00 - 10.25

8.91

10.08

August 

5

375

4,449

178

7.50 -10.00

9.00

9.65

July 

20

325

5,130

166

7.50 -12.00

9.06

9.24

June

5

480

1,608

95

7.50 - 10.50

8.35

9.13

May 

10

177

2,143

79

7.00 - 9.00

8.08

9.09

April

25

318

2,518

114

7.75 - 12.00

9.30

9.06

March

20

364

3,993

148

7.50 - 9.00

8.38

9.02

February 

10

188

1,888

105

7.50 - 9.00

8.39

9.03

January 1998

10

267

1,872

81

7.50 - 9.00

8.07

9.02

               

*: Interbank Weighted Average Interest Rate.

**: Simple Average for the month, actual for the week.

#: Auction week.

@: For transactions days only.

 

COMMERCIAL BANKING SECTOR DEVELOPMENTS

 

Main Features

Commercial banks' credit to the private sector increased by Rs1,019 million or by 1.9 per cent to Rs54,423 million at the end of November 1998. Credit was mainly channelled to "Traders" (Rs282 million), "Personal & Professional" (Rs231 million), "Housing" (Rs115 million) and "Development Certificate Holders" (Rs111 million). Commercial banks’ investments in Treasury Bills and Government securities fell by Rs202 million or by 1.5 per cent to Rs12,874 million while their investments in shares and debentures rose by Rs326 million or by 4.1 per cent to Rs8,348 million.

 

Table 8: Commercial Banks' Selected Assets and Liabilities

(End of Period) (Rs million)
 
 
 

 

Nov-98

Oct-98

Sep-98

Aug-98

Jul-98

Jun-98

             

Assets

           
             

Cash in Hand & Balances with BoM

4,256

4,685

3,880

4,035

4,093

3,920

Investments in Bills and Govt. Securities

12,874

13,076

14,373

14,069

14,366

15,203

Foreign Assets

6,690

6,294

6,529

5,634

5,763

7,113

Claims on Private Sector

54,423

53,404

51,912

51,149

50,161

49,234

             

Liabilities

           
             

Capital & Reserves

8,981

8,989

9,002

9,139

9,098

8,372

Total Deposits

68,199

67,866

67,414

65,889

65,540

66,660

of which :

           

Demand

5,046

5,161

5,512

4,677

4,680

5,131

Time 

27,100

26,930

26,284

26,349

26,499

26,234

Savings*

29,601

29,421

29,400

29,157

28,625

28,244

Government

663

662

604

494

577

803

Foreign Currency Deposits

5,789

5,692

5,613

5,213

5,159

6,248

Borrowing from Banks Abroad

1,648

1,493

1,284

996

989

864

             

*: Includes Margin Deposits.

Figures may not add up to total due to rounding.

Total deposits with commercial banks rose by Rs333 million or by 0.5 per cent to Rs68,199 million at the end of November 1998. Demand deposits fell by Rs115 million or 2.2 per cent to Rs5,046 million while time deposits increased by Rs170 million or by 0.6 per cent to Rs27,100 million. Savings deposits went up by Rs180 million or by 0.6 per cent to Rs29,601 million. Government deposits with banks amounted to Rs663 million and foreign currency deposits rose by Rs97 million or by 1.7 per cent in November 1998 to Rs5,789 million.

 

Interest Rate Structure

The rate of interest on savings deposits increased from 9.00 per cent at the end of November 1998, from 8.00 per cent at the end of October 1998. With the rate of inflation estimated at 6.5 per cent for the twelve-month period ended November 1998, the real rate of interest on savings deposits went up from 1.8 per cent in October 1998 to 2.3 per cent in November 1998.

Commercial banks' deposits rates ranged between 8.00 per cent and 11.50 per cent in November 1998 while their maximum lending rate went up by 1.5 percentage points to 21.00 per cent. Their prime lending rates varied between 10.50 per cent and 13.00 per cent.

 

Table 9: Commercial Banks' Deposit and Lending Rate Structure

(Per cent per annum)
 
 
 

 

Nov-98

Oct-98

Sep-98

Aug-98

         

1. Savings Deposits

9.00

8.00

8.00

8.00

2. Time Deposits

8.00 - 11.50

8.00 - 14.00

8.00 - 14.00

8.00 - 14.00

of which:

       

(a) up to 1 year

8.00 - 10.00

8.00 - 10.00

8.00 - 10.00

8.00 - 10.00

(b) exceeding 1 year & up to 2 years

8.37 - 11.00

8.37 - 10.00

8.37 - 9.50

8.37 - 9.25

(c) exceeding 2 years

8.25 - 11.50

8.25 - 14.00

8.25 - 14.00

8.25 - 14.00

3. Lending Rates

10.00 - 21.00

10.00 - 19.50

10.00 - 21.00

10.00 - 21.00

of which:

       

(a) Loans

10.00 - 20.50

10.50 - 19.50

10.50 - 21.00

10.50 - 21.00

(b) Overdraft Facilities 

10.00 - 21.00

10.00 - 19.50

10.00 - 19.50

10.00 - 19.50

         

Note: In November 1998, commercial banks' weighted average rate of interest on term deposits was 9.32 per cent and their weighted average lending rate was 13.74 per cent.

Cash Ratio

The weekly average cash ratio of commercial banks during November 1998 was maintained above the minimum required of 5.5 per cent. Table 10 below shows the average cash ratios maintained by commercial banks during the period September 1998 through November 1998.

 

Table 10: Maintenance of Cash Ratio

 
 
 
 

Week 

Deposit

Average

Required

Excess

Average

Ended

Base*

Cash 

Minimum

Cash

Cash

   

Balances

Cash 

Holdings

Ratios

   

Held for

Balances

   
   

the Week

 

(2) - (3)

(2) / (1)

 

(1)

(2)

(3)

(4)

(5)

 

Rs million

(%)

           

26-Nov-98

67,361

4,364

3,705

659

6.5

19-Nov-98

67,419

3,980

3,708

272

5.9

12-Nov-98

67,504

3,831

3,713

118

5.7

05-Nov-98

67,067

4,336

3,689

647

6.5

29-Oct-98

66,920

4,383

3,681

702

6.6

22-Oct-98

66,873

4,138

3,678

460

6.2

15-Oct-98

66,836

3,765

3,676

89

5.6

08-Oct-98

66,936

3,732

3,682

50

5.6

01-Oct-98

65,980

4,276

3,629

647

6.5

24-Sep-98

65,672

4,396

3,612

784

6.7

17-Sep-98

65,732

4,110

3,615

495

6.3

10-Sep-98

65,489

3,849

3,602

247

5.9

03-Sep-98

64,853

4,083

3,567

516

6.3

           

*: The deposit base is lagged by one week.

 

 

 

 

Inward and Outward Remittances

In November 1998, foreign exchange receipts of commercial banks increased by Rs43 million to Rs4,964 million and outward payments rose by Rs38 million to Rs6,563 million, resulting in a shortfall of Rs1,599 million as compared to a shortfall of Rs1,604 million in October 1998.

During November 1998, sales of US dollar by Bank of Mauritius to commercial banks through intervention on the interbank foreign exchange market amounted to US$24.7 million, equivalent to Rs613 million. Direct sales of foreign currencies by the Mauritius Sugar Syndicate (MSS) to commercial banks during the same month amounted to an equivalent of US$32.7 million or Rs817 million.

 

Table 11: Inward and Outward Remittances

(Rs million)
 
 
 

 

Inward 

Outward

Difference 

 

Remittances

Remittances

Between

 

(1)

(2)

(1) & (2)

       

Nov-98

4,964

6,563

-1,599

Oct-98

4,921

6,525

-1,604

Sep-98

4,716

5,617

-901

Aug-98

4,549

5,053

-504

Jul-98

5,013

5,996

-983

Jun-98

5,196

6,121

-925

May-98

4,505

5,245

-740

Apr-98

4,653

5,737

-1,084

Mar-98

4,928

5,881

-953

Feb-98

4,394

5,100

-706

Jan-98

4,421

4,675

-254

Dec-97

4,682

5,595

-913

Nov-97

5,284

4,885

399

       

 

 

 

 

OFFSHORE BANKING SECTOR DEVELOPMENTS

 

Total assets of offshore banks increased by US$2.9 million or by 0.2 per cent, from US$1,690.6 million at the end of October 1998 to US$1,693.5 million at the end of November 1998.

Non-bank deposits with offshore banks went down by US$47.4 million or by 5.3 per cent to US$855.4 million at the end of November 1998. Borrowings from banks increased by US$42.0 million or by 8.3 per cent to US$548.4 million over the same period.

Offshore banks’ cash balances and placements with banks abroad declined by US$7.4 million or by 0.6 per cent to US$1,235.6 million at end of November 1998. Investments in bonds and other securities decreased by US$0.3 million to US$56.0 million. Loans and advances to non-bank customers increased by US$10.2 million or by 2.7 per cent to US$389.3 million.

Off-balance sheet items of offshore banks, including acceptances, guarantees, documentary credits and foreign exchange contracts, amounted to US$139.1 million, down from US$141.6 million at end of October 1998.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 12: Consolidated Assets and Liabilities of Offshore Banks

(End of Period) (US$ million)

 
 
 

   

Nov-98

Oct-98

Sep-98

Dec-97

           

ASSETS EMPLOYED 

         
           

Assets

         

Cash in Hand and Balances with Banks

 

1,235.6 

1,243.0 

1,045.5 

654.3 

Investments in Bonds and Other Securities

 

56.0 

56.3 

56.3 

34.8 

Loans and Advances to Non-bank Customers

 

389.3 

379.1 

376.4 

214.7 

Bills Purchased and Discounted

 

1.8 

2.2 

2.3 

3.5 

Other Assets

 

10.8 

10.0 

8.6 

6.5 

 

[A]

1,693.5 

1,690.6 

1,489.1 

913.8 

Less :

         

Liabilities

         

Deposits of Non-bank Customers

 

855.4 

902.8 

822.7 

669.4 

Amounts due to Banks

 

548.4 

506.4 

396.6 

190.3 

Other Liabilities

 

41.4 

40.8 

35.8 

15.6 

 

[B]

1,445.2 

1,450.0 

1,255.1 

875.3 

           

Excess of Assets over Liabilities

[A]-[B]

248.3 

240.6 

234.0 

38.5 

           

FINANCED BY :

         

Capital and Reserves

 

248.3 

240.6 

234.0 

38.5 

           
           
           

Off-Balance Sheet Items

 

139.1 

141.6 

135.0 

110.4 

           

 

 

 

 

 

 

FOREIGN EXCHANGE MARKET

International Foreign Exchange Market Review

On the international foreign exchange market, the US dollar, on average, depreciated against all major currencies during December 1998.

This month was marked by the co-ordinated move of members of the European Union which surprised the financial markets by cutting their respective interest rates. On 3 December 1998, with the exception of Italy which set a rate of 3.5 per cent, all the countries adopting the euro as from January 1999 lowered their main money market rates to 3.0 per cent. The rate moves were led by the Bundesbank and the Banque de France. The Bank of Italy lowered its key interest rate to 3.0 per cent on 23 December 1998. The European Central Bank, aiming at smoothing the adaptation of market participants to the integrated euro money market during the initial days of monetary union, set its deposit rate or interest rate floor at 2.75 per cent and its marginal lending rate or interest rate ceiling at 3.25 per cent on 22 December 1998.

The US dollar, driven by strong selling interest from Japanese exporters and investors, fell to a low of 114.62 yen at the end of December 1998 from an opening month high of 121.85 yen. The dollar’s slide vis-à-vis the yen was also partly due to a rise in Japanese long-term rates leading to a narrowing of the interest rate differential between the United States and Japan. The yield on 10-year Japanese Government Bonds has been rising to 2.010 per cent at the end of December 1998 from 1.040 per cent at the end of November 1998. From an average of 120.49 yen in November 1998, the US dollar weakened to an average of 117.09 yen in December 1998.

 

Table 13: Exchange Rates of Selected Currencies vis-à-vis the US Dollar*

 
 
 
 

 

Dec-98

Dec-98

Dec-98

Nov-98

 

High

Low

Average

Average

         

YEN / USD

121.85/95

114.62/67

117.09/17

120.49/57

DEM / USD

1.6850/60

1.6455/65

1.6686/95

1.6831/40

USD / GBP

1.6545/55

1.6928/38

1.6727/36

1.6598/07

FRF / USD

5.6460/90

5.5260/90

5.5945/68

5.6449/68

         

Source: Reuters.

*: New York Closing Rates.

The US dollar which traded at an average of 1.6831 Deutsche mark in November 1998 fell to an average of 1.6686 in December 1998. The US currency came under downward pressure against the Deutsche mark as investors bought the German currency ahead of the introduction of the single currency.

The Bank of England, in its December 1998 Monetary Policy Committee meeting, met market expectations by cutting UK base rate by 50 basis points to 6.25 per cent. Nevertheless, the Pound sterling strengthened against the US dollar, trading at an average level of 1.6727 against the dollar in December 1998 as against an average of 1.6598 in November 1998. In a statement, the Bank of England hinted that monetary policy might be further loosened.

The US dollar which traded at an average level of 5.6449 French franc in November 1998 fell to an average of 5.5945 franc in December 1998.

 

Interbank Foreign Exchange Market Review

Total transactions on the interbank foreign exchange market in December 1998 amounted to an equivalent of US$12.8 million. The average daily turnover in December 1998 was US$0.6 million. The opening interbank Rs/US$ ask rate in December 1998 varied in the range of 24.65-24.78 as compared to a range of 24.74-24.85 in the previous month.

 

Table 14: Interbank Foreign Exchange Market

 
 
 
 

Weekly

Purchase of 

Purchase of 

Total Purchases

Opening

Position 

US$ against

US$ against 

US$ 

Rupee

Interbank 

(Transaction 

Rupee 

Other Foreign

Equivalent

Equivalent

Min-Max

Days only) 

 

Currencies

   

Ask Rate*

 

(US$ million)

(US$ million)

(US$ million)

(Rs million)

(Rs/US$)

           

December 1998

         

Week V

0.2

0.7

1.0

24.2

24.7275 - 24.7600

Week IV

3.4

1.6

5.0

123.5

24.7075 - 24.7600

Week III

2.7

0.8

3.5

86.4

24.6475 - 24.7100

Week II

0.3

1.6

1.9

47.6

24.6725 - 24.7450

Week I

0.5

0.7

1.4

34.2

24.7250 - 24.7800

December 1998

7.1

5.4

12.8

315.9

24.6475 - 24.7800

November 1998

1.0

6.4

7.9

192.5

24.7400 - 24.8500

*: With effect from 1 October 1998, the Rs/US$ ask rate is based on the average of daily Rs/US$ ask rates of four major commercial banks.

In December 1998, the Bank of Mauritius sold US$5.0 million to commercial banks through intervention on the interbank foreign exchange market. Direct sales of foreign currencies by the Mauritius Sugar Syndicate (MSS) to the banking sector amounted to US$24.5 million in December 1998.

 

Table 15: Bank of Mauritius - Intervention and Related Transactions on the Interbank Foreign Exchange Market

 
 
 
 

Period

Sale of 

Range of

Purchase 

Range of

 

US dollar

Intervention

of US$ dollar

Intervention

 

(US$ Mn)

(Rs/US$ Ask Rate)

(US$ Mn)

(Rs/US$ Bid Rate)

         

December 1998

5.0

24.70

5.0

24.70-24.75

November 1998

24.7

24.73-24.83

-

-

October 1998

14.5

24.56-24.78

-

-

September 1998

6.1

24.40

-

-

August 1998 

4.7

24.45

1.0

24.35

July 1998

21.6

24.30-24.32

-

-

         

 

 

 

Exchange Rate of the Rupee

Between the 12-month period ended December 1997 and the 12-month period ended December 1998, the rupee appreciated vis-à-vis the New Zealand dollar (8.4 per cent), South African rand (4.8 per cent) and Australian dollar (3.7 per cent).

In contrast, the rupee depreciated, amongst others, against the Pound sterling (13.2 per cent), Swiss franc (12.6 per cent), China yuan (12.4 per cent), US dollar (12.3 per cent), Hong Kong dollar (12.2 per cent), ECU (11.8 per cent), French franc (11.7 per cent), Deutsche mark (11.3 per cent) and Japanese yen (5.3 per cent).

 

 

Table 16: Exchange Rate Movements of the Rupee vis-à-vis Major Trading Partner Currencies

 
 
 
 

Indicative 

Average for

Average for

Appreciation/

Selling Rates

12 Months

12 Months

(Depreciation)

 

ended Dec-97

ended Dec-98

of Rupee

 

[1]

[2]

Between [1] & [2]

 

Rupees

Rupees

Per Cent

       

Australian dollar

15.778

15.210

3.7 

Belgian franc (100)

60.017

67.457

(11.0)

China yuan

2.590

2.957

(12.4)

French franc

3.624

4.102

(11.7)

Deutsche mark

12.196

13.753

(11.3)

Hong Kong dollar

2.774

3.160

(12.2)

Indian rupee (100)

59.116

59.208

(0.2)

Italian lira (1000)

12.609

14.087

(10.5)

Japanese yen (100)

17.597

18.584

(5.3)

Kenya shilling (100)

36.417

40.684

(10.5)

New Zealand dollar

14.050

12.960

8.4 

Singapore dollar

14.465

14.652

(1.3)

South African rand

4.662

4.449

4.8 

Swiss franc

14.592

16.691

(12.6)

US dollar

21.201

24.164

(12.3)

Pound sterling

34.718

40.020

(13.2)

ECU

24.012

27.228

(11.8)

Notes:

  1. With effect from 8 September 1998, there are no dealings for the Malaysian Ringgit on account of its withdrawal from the international financial system.
  2. [1] is calculated on the basis of the monthly average exchange rates for the period January 1997 to December 1997.

[2] is calculated on the basis of the monthly average exchange rates for the period January 1998 to December 1998.

  1. With effect from October 1998, the daily average exchange rate of the Rupee is based on the average selling rates for T.T. & D.D. of all commercial banks.
  2. The appreciation/depreciation of the exchange rate of the Rupee is calculated as follows:

(Previous month exchange rate - Current month exchange rate) ¸ Current month exchange rate

 

Table 17: Exchange Rate of the Rupee (End of Period)

 
 
 
 

Indicative 

Sep-98

Oct-98

Nov-98

Dec-98

Selling Rates

       
         
         

Australian dollar

14.750

15.680

15.860

15.400

Belgian franc(100)

72.400

73.350

70.910

72.500

China yuan

3.010

3.050

3.070

3.050

French franc

4.386

4.508

4.359

4.427

Deutsche mark

14.710

15.120

14.630

14.860

Hongkong dollar

3.220

3.260

3.270

3.260

Indian rupee(100)

59.000

60.000

59.000

59.000

Italian lira(1000)

15.100

15.320

14.770

14.990

Japanese yen(100)

18.260

21.670

20.290

21.800

Kenya shilling(100)

41.620

42.400

42.230

40.970

New Zealand dollar

12.430

13.300

13.260

13.200

Singapore dollar

14.810

15.600

15.310

15.220

South African rand

4.290

4.430

4.450

4.310

Swiss franc

17.730

18.610

17.720

18.060

US dollar

24.627

24.979

24.999

24.940

Pound sterling

42.020

41.902

41.245

41.504

ECU

29.100

29.800

28.780

29.170

         

Notes:

  1. With effect from 8 September 1998, there are no dealings for the Malaysian Ringgit on account of its withdrawal from the international financial system.
  2. With effect from October 1998, the end-of-period exchange rate of the Rupee is based on the average end-of-period selling rates for T.T. & D.D. of all commercial banks.

 

 

 

Bank of Mauritius Foreign Exchange Reserves

The foreign exchange reserves of the Bank of Mauritius increased to Rs13,867 million at the end of December 1998, from Rs12,658 million at the end of November 1998..

 

Net International Reserves of Mauritius

Net international reserves of the country, made up of the net foreign assets of the banking system, the foreign assets of Government and the country’s Reserve Position in the International Monetary Fund (IMF) increased by Rs1,954 million, from Rs17,940 million at the end of November 1998 to Rs19,894 million at the end of December 1998.

Based on the value of the import bill for the fiscal year 1997-98 (excluding the purchase of aircraft and marine vessel), the end-December 1998 level of net international reserves of the country represented 22.1 weeks of imports, up from 19.9 weeks of imports at the end of November 1998.

Table 18: Net International Reserves of Mauritius

 
 
 
 

 

Bank of 

Commercial

Others*

Net

Import

 

Mauritius

Banks Net

 

International

Coverage

 

Foreign

Foreign

 

Reserves

(No. of weeks)

 

Assets

Assets

   

#

   

(Rs million)

   
           

Dec-98

13,867

5,777

250

19,894

22.1

Nov-98

12,658

5,042

240

17,940

19.9

Oct-98

12,780

4,801

236

17,817

19.8

Sep-98

14,121

5,245

230

19,596

21.7

Aug-98

14,038

4,638

232

18,909

21.0

Jul-98

14,131

4,774

231

19,136

21.2

Jun-98

14,869

6,249

231

21,349

23.7

May-98

14,452

6,122

227

20,801

23.1

Apr-98

14,743

5,873

227

20,843

23.1

Mar-98

15,308

6,633

225

22,166

24.6

*: Includes Foreign Assets of Government and the country's reserve position in the IMF.

#: Based on the value of the import bill for the fiscal year 1997-98 (excluding the purchase of aircraft and marine vessel).

APPENDICES

BANK OF MAURITIUS ASSETS AND LIABILITES AS AT 31 DECEMBER 1998

 

 

 

   

December 1998

   

November 1998

   

Rupees 

   

Rupees 

CAPITAL AND RESERVES

         

Authorised Capital

 

10,000,000

   

10,000,000

           

Issued and Paid up Capital

 

10,000,000

   

10,000,000

General Reserve Fund

 

23,000,000

   

23,000,000

   

33,000,000

   

33,000,000

Other Reserves

 

9,124,368,051

   

9,124,368,051

   

9,157,368,051

   

9,157,368,051

Represented by: 

ASSETS

External Assets:

Gold & Foreign Assets

 

4,680,471,117

   

3,462,207,060

Special Drawing Rights

 

771,096,624

   

741,073,394

Foreign Investments

 

8,379,138,727

   

8,419,134,321

Others

 

35,907,001

   

35,654,859

   

13,866,613,469

   

12,658,069,634

Discounts & Advances 

 

4,835,300,911

   

4,820,944,975

Government securities

 

1,303,520,057

   

1,582,114,038

Fixed Assets

 

112,860,526

   

110,656,754

Other Assets*

 

171,078,758

   

184,217,641

   

20,289,373,721

   

19,356,003,042

Less:

         

LIABILITIES

         

Notes in Circulation

 

7,814,443,505

   

6,610,905,010

Coin in Circulation

 

244,305,934

   

225,572,551

   

8,058,749,439

   

6,836,477,561

Demand Deposits:

         

Government

 

12,068,427

   

8,774,521

Commercial Banks

 

1,673,991,613

   

2,391,655,911

Other Financial Institutions 

38,624,964

   

30,054,449

Others

 

10,577,367

   

7,461,308

   

1,735,262,371

   

2,437,946,189

Bank of Mauritius Instruments

319,186,900

   

323,752,900

Provisions & Other Liabilities

1,018,806,960

   

600,458,341

   

11,132,005,670

   

10,198,634,991

   

9,157,368,051

   

9,157,368,051

           

* Includes investments under section 12(j) of the Bank of Mauritius Act.

 
               

CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF COMMERCIAL BANKS AS AT END NOVEMBER 1998

 

 

 

   

November 1998

   

October 1998

   

Rupees

   

Rupees

ASSETS EMPLOYED

         

ASSETS

         

Cash in Hand & Balances with BOM

 

4,256,412,943

   

4,685,079,932

Balances & Placements

         

Banks in Mtius & Abroad

 

3,499,750,915

   

3,420,936,230

Offshore Banks in Mtius

 

338,185,195

   

260,389,152

   

3,837,936,110

   

3,681,325,382

Investment in Govt & BOM Securities

12,874,475,121

   

13,075,942,161

Foreign Currency Notes & Coin

 

133,414,962

   

98,142,456

Loans & Overdrafts to Customers

         

Private Sector

 

43,921,444,104

   

43,245,547,450

Government

 

237,210,261

   

245,034,720

   

44,158,654,365

   

43,490,582,170

Other Advances

         

Local

 

2,153,574,144

   

2,136,511,657

Foreign

 

2,414,463,382

   

2,133,720,065

   

4,568,037,526

   

4,270,231,722

Other Investments

 

9,141,927,195

   

8,814,006,718

Fixed Assets

 

4,473,110,145

   

4,423,249,854

Other Assets

 

3,032,355,878

   

2,933,815,518

   

86,476,324,245

   

85,472,375,913

Less:

         

LIABILITIES

         

Deposits

         

Demand

 

11,498,119,155

   

11,515,456,252

Savings

 

29,572,033,089

   

29,399,805,194

Time

 

27,129,014,900

   

26,951,711,704

   

68,199,167,144

   

67,866,973,150

Borrowings

         

Bank of Mauritius

 

250,000,000

   

250,000,000

Banks in Mtius & Abroad

 

1,649,475,791

   

1,494,010,781

Offshore Banks in Mtius

 

125,821,835

   

20,047,534

Others

 

40,872,014

   

42,221,595

   

2,066,169,640

   

1,806,279,910

Other Liabilities

 

7,230,373,345

   

6,809,979,565

   

77,495,710,129

   

76,483,232,625

   

8,980,614,116

   

8,989,143,288

FINANCED BY

         

CAPITAL & RESERVES

         

Issued & Paid-Up Capital

 

2,717,546,594

   

2,717,546,594

Reserves & Surplus

 

6,188,913,607

   

6,197,480,780

   

8,906,460,201

   

8,915,027,374

LOANS

 

74,153,915

   

74,115,914

   

8,980,614,116

   

8,989,143,288

MEMORANDUM ITEMS

         

Documentary Letters of Credit, Acceptances,

     

Endorsements & other Obligations on

       

account of Customers

 

13,250,929,663

   

12,939,620,885

Inward Bills Held for Collection

 

1,230,445,466

   

1,236,243,548

Outward Bills Sent for Collection

 

848,838,233

   

851,312,898

COMMERCIAL BANKS' CONSOLIDATED STATEMENT OF SECTOR-WISE DISTRIBUTION OF CREDIT TO THE PRIVATE SECTOR AS AT END NOVEMBER 1998

Figures rounded to the nearest Rupee
 
 
 

Private Sectors

Overdrafts

Loans*

Bills

Bills

Total

     

Purchased &

Receivable

 
     

Discounted

   
           

1. Mauritius Sugar Syndicate

349,948,433

50,000,000

0

0

399,948,433

2. Sugar Industry – Estates

494,759,674

1,572,753,825

9,365

0

2,067,522,864

3. Sugar Industry – Others

154,722,610

130,993,639

26,300,504

0

312,016,752

4. Other Agricultural Interests

232,721,830

235,633,826

3,763,021

0

472,118,678

5. Export Enterprise Cert. Holders

2,780,289,442

2,698,487,365

130,390,243

192,206,875

5,801,373,926

6. Development Certificate Holders

178,259,023

1,034,291,821

6,902,738

54,154,522

1,273,608,104

7. Agricultural Dev. Cert. Holders

37,101,857

20,462,484

0

0

57,564,342

8. Export Service Certificate Holders

67,079,622

48,456,149

4,213,250

0

119,749,021

9. Pioneer Status Certificate Holders

68,793,712

86,787,150

0

5,709,306

161,290,168

10. Housing Dev. Cert. Holders

19,531,686

32,533,974

0

0

52,065,660

11. Hotel Management Cert. Holders

163,947,763

412,759,821

0

0

576,707,585

12. Small Scale Industries

135,677,334

108,016,226

4,011,602

162,220

247,867,382

13. Ex-Dc Industries

335,129,721

143,349,877

0

8,335,662

486,815,259

14. Other Industries & Manufacturers

2,339,953,774

2,045,730,928

12,795,906

222,895,817

4,621,376,424

15. Industrial Building Ent. Cert. Holders

56,186,036

104,673,596

0

0

160,859,632

16. Strategic Local Ent. Cert. Holders

5,417,926

0

0

0

5,417,926

17. Housing (including Rodrigues)

417,525,944

5,230,561,942

155,771,268

0

5,803,859,154

18. Hotels (other than item 11 above)

794,683,320

569,587,270

0

0

1,364,270,590

19. Transport

106,899,195

518,424,555

137,145

0

625,460,895

20. Statutory and Para-Statal Bodies

349,045,636

345,280,482

0

0

694,326,118

21. Building Contractors, etc.

1,131,235,794

1,181,719,436

7,716

0

2,312,962,946

22. Traders

4,997,194,618

3,314,055,228

134,419,573

945,039,164

9,390,708,583

23. Stock Brokers

111,601,972

29,559,876

0

0

141,161,848

24. Personal & Professional

2,156,203,233

3,873,853,106

153,225,907

0

6,183,282,246

25. Financial Institutions

690,228,605

266,701,742

533,850

0

957,464,198

26. Other Customers

989,554,270

703,076,756

18,627,170

73,961,320

1,785,219,516

           

Total

19,163,693,031

24,757,751,073

651,109,258

1,502,464,886

46,075,018,249

Investment in Private Sector

       

8,347,945,216

TOTAL CREDIT TO PRIVATE SECTOR

       

54,422,963,465

*: Includes Loans and Other Financing in Foreign Currencies.

 

 

 

 

COMMUNIQUÉ

BANKS AND NON-BANK DEPOSIT TAKING INSTITUTIONS

 

The Bank of Mauritius once again draws the attention of the public to the provisions of the law relating to transacting of banking business, offshore banking or deposit-taking business, all of which are regulated under the Banking Act 1988 and defined as follows:

"banking business" means -

(i) the business of accepting deposits of money repayable on demand or after fixed periods or after notice, by cheque or otherwise; and

(ii) the employment of such deposits in making or giving loans, advances, overdrafts or similar facilities for the account and at the risk of the person accepting such deposits.

"offshore banking" means banking business or investment banking business conducted in currencies other than the Mauritian rupee except to the extent permitted by the central bank for trading on the foreign exchange market of Mauritius and investment in money market instruments.

"deposit-taking business" means the business of accepting deposits of money and the employment of such deposits to finance the specific business activities of the non-bank financial institution accepting such deposits.

No person in Mauritius is authorised to do any banking business, offshore banking or deposit-taking business without being duly licensed or authorised by the Bank of Mauritius.

The law further provides that every licensee, under the Banking Act 1988, shall at all times display its licence or authorisation in a conspicuous place in the public part of its every place of business.

The public is reminded not to deal with any party alleging to be a bank or deposit-taking institution without first ascertaining whether it holds a banking licence or deposit-taking authorisation as specified above.

A list of domestic and offshore banks licensed to transact banking business or offshore banking and non-bank financial institutions authorised to transact deposit-taking business in Mauritius is displayed on the notice board in the Banking Hall of the Bank of Mauritius and is given on the next page.

 

Domestic Banks

1. Bank of Baroda

2. Banque Nationale de Paris Intercontinentale

3. Barclays Bank PLC

4. Habib Bank Limited

5. Indian Ocean International Bank Limited

6. South East Asian Bank Ltd

7. State Bank of Mauritius Ltd

8. The Delphis Bank Limited

9. The Hongkong and Shanghai Banking Corporation Limited

10. The Mauritius Commercial Bank Ltd

 

Offshore Banks

1. African Asian Bank Limited

2. Bank of Baroda

3. Banque Internationale des Mascareignes Ltée

4. Banque Nationale de Paris Intercontinentale

5. Barclays Bank PLC

6. Investec Bank (Mauritius) Limited

7. P.T Bank Internasional Indonesia

8. State Bank International Ltd

9. The Hongkong and Shanghai Banking Corporation Limited

 

Non-bank Financial Institutions Authorised to Transact Deposit-taking Business

  1. Finlease Company Limited
  2. General Leasing Co. Ltd
  3. Mauritius Housing Company Ltd
  4. Mauritius Leasing Company Ltd
  5. MUA Leasing Company Ltd

6. SBM Lease Limited

7. SICOM Limited

 

BANK OF MAURITIUS

31 December 1998

http://www.bom.mu/pdf/Research_and_Publications/Monthly_Statistical_Bulletin/Dec1998/Image119.gif

BANK OF MAURITIUS

PRESS COMMUNIQUÉ

Over the Counter Sale of Government of Mauritius Treasury Bills by Bank of Mauritius

 

It is notified for general information that effective Monday 14 December 1998, the Bank of Mauritius will sell on a weekly basis over the counter, Government of Mauritius Treasury Bills with maturities which would be communicated in the press.

2. Eligible Purchasers

The Bills will be sold in multiples of Rs100,000 to individuals and non-financial corporations only. Individuals will have the option to register the Bills in the name of:

(i) a single adult

(ii) two adults jointly, repayable to them jointly or to either or survivor

(iii) a minor by a guardian.

3. Applications for Bills

Applications from individuals and non-financial corporations as mentioned at paragraph 2 above for the purchase of Bills should be made on forms obtainable at the counter of the Secondary Market Cell, c/o Bank of Mauritius, corner Sir William Newton Street and Royal Road, Port Louis, between 9.30 a.m. and 2.30 p.m. on the days on which the Bills will be sold.

Each application should be accompanied by a banker’s cheque or cheque certified by a bank drawn in favour of the Bank of Mauritius for the payment of the cost price.

Individuals should bring along with them their National Identity Card.

On acceptance of applications, certificates of holdings of Treasury Bills will be issued after 2 working days.

4. Marketability and Registers of Bills and Transfers

(a) The Bills may be freely traded on the Stock Exchange of Mauritius.

(b) The Bills will be transferable in multiples of Rs100,000. Buyers and sellers will be required to call at the Bank of Mauritius for the purpose of registering transfers.

(c) Registers of holdings and transfers of Bills will be kept at the Bank of Mauritius.

5. Redemption of Bills

The Bills will be redeemed at par on their respective maturity dates.

6. Explanatory Notes for Computation of Yield

An example of the cost to be paid and yield obtainable on purchase of Bills is given below:

Nominal Amount : Rs100,000

Date of Purchase : 14 December 1998

Maturity Date : 12 February 1999

No. of Days to Maturity : 60 days

Price per Rs100 Nominal Amount : 98.05

The cost price for the purchase of Rs100,000 nominal Bills at 98.05% will be Rs98,050.- and on maturity date, i.e. 12 February 1999, the investor will receive an amount of Rs100,000. The yield to the investor on the investment will work out to 12.10% per annum as follows:

(100 - 98.05) x (365) x 100 =12.10% p.a

(98.05) (60)

 

7. Income Tax

According to the Income Tax Act 1995, the following income shall be exempt from income tax.

(a) The first Rs75,000 receivable in any income year by an individual personally or as an associate in a société or as a beneficiary in the estate of a deceased person in respect of interest on –

(i) Government securities(including Treasury Bills);

(ii) Bills issued by the Mauritius Civil Service Mutual Aid Association Ltd; or

(iii) fixed deposit or savings accounts in Mauritius with a bank or other institution authorised by any other enactment to accept money on fixed deposit or savings accounts and to pay interest on it in Mauritius.

(b) Where, in the case of a couple, the interest receivable referred to in paragraph (a) is in the joint name of the spouses and neither spouse is a dependent spouse, the exemption under paragraph (a) shall be allowed in any proportion as may be claimed by the spouses, provided that, in the aggregate, the exemption does not exceed Rs150,000.

 

 

Bank of Mauritius

10 December 1998

 

http://www.bom.mu/pdf/Research_and_Publications/Monthly_Statistical_Bulletin/Dec1998/Image119.gifBANK OF MAURITIUS

PRESS COMMUNIQUÉ

 

ISSUE OF GOVERNMENT OF MAURITIUS TREASURY BILLS

 

 

It is notified for general information that as from 24 December 1998, Government of Mauritius Treasury Bills will also be issued to fund managers at the weekly auctions.

The other terms and conditions governing the issue of Bills will be the same as those set out in General Notices Nos. 1572 of 1991 and 335 of 1992.

 

 

 

Bank of Mauritius

24 December 1998

 

 

 

 

 

 

 

 

 

 

 

ADDRESS BY R. BASANT ROI, GOVERNOR OF THE BANK OF MAURITIUS AT THE BANK OF MAURITIUS ANNUAL DINNER WITH THE PRIVATE SECTOR

 

Welcome to the Bank of Mauritius Annual Dinner.

Let me at the outset warmly thank all of you, in particular the representatives of commercial banks and the non-bank private sector for the support extended to the Bank of Mauritius in the first 18 days of my Governorship. I do fervently hope that the co-operation between the bank and all the economic agents and players will continue for years.

I am pleased to observe that credibility in Bank’s monetary policy making is now firming up. This improvement has a lot to do with the re-orientation of the monetary policy stance of the Bank of Mauritius in the last two weeks. The policy commitment manifested by the Bank will no doubt help reduce risk premiums and stabilize expectations, both with regard to the medium and long term viability of our monetary track and the prospects for sustainable low inflation.

Someone has likened the operation of monetary policy to drawing a brick across a table with a piece of elastic - either the brick does not move or it flies across the table and hits you in the face. Although this analogy seems closer to reality than the finely structured econometric models, I must say that, in the conduct of its monetary policy, the Bank of Mauritius is certainly not seeking to be hit in the face. The Bank is pulling the elastic, the brick is moving. Monetary tightening is the order of the day,

An appropriate monetary policy stance combined with an improvement in the quality of fiscal deficit should bring about more stable and "better behaved" exchange rates in the near future. There are signs already of a "better behaved" exchange rate of the rupee. Of course, it is possible for exchange rates to overreact even in the best of circumstances. But the chances of a misalignment are lower when markets are operating in an environment of greater predictability stemming from a monetary policy stance grounded in domestic price stability. When exchange rates are not anchored by a credible policy commitment to durable price stability, it is difficult for markets to perform the tasks that are expected of them. In the Mauritian context, we cannot afford to lose sight of the monetary and exchange rate implications of across-the-board increases in wages. Productivity improvement of both labour and capital is a key to sustainable non-inflationary growth in the long run.

The Bank of Mauritius is concerned with the prevailing monetary conditions. We, at the Bank, have given immediate attention to the monetary situation. Monetary stability and financial stability are inextricably intertwined. The risk of bank failure is high in a liberalised financial system. In the heat of competition, the tendency to ignore basic rules and prudent practices is strong. Let me digress a little here to say that banks should price credit appropriately, in particular to the relatively risk-free borrowers. It is not elegant to read about banks seizing house, buildings and landed property of their customers, it also reflects poor credit appraisals by their respective loan officers. While I do maintain that the only social responsibility of business is to increase profits so long as companies are engaged in open competition, rules, sound and standard principles and the law have to be adhered to. Often the working of what economists call the "invisible hands" of the market are prevented to do job they are supposed to do. Fingers are used; legs also are used and many more extra market instruments are used to render the market imperfect. Market imperfections, variously defined, do jeopardize financial stability.

Part of the answer to such problems must be found in the behaviour of practitioners of banking. Now, more than ever, bankers must be bankers. Fad and fancy must be put aside in favour of fundamentals - fundamentals including rigorous discipline in credit decision making process and equally rigorous discipline in the management of operating expenses. With the golden goose so active in the laying house, why do anything other than feast continuously on omelette after omelette? We need a change in our attitude.

While I was preparing this address early today I was reminded of a remark by one of the greatest members of the banking profession - Bernhard Baruch. In his biography Baruch quotes with envy the following statement by Sir Ernest Cassell "When as a young and unknown man I started to be successful, I was referred to as a gambler. My operations increased in scope and volume. Then I was known as a speculator. The sphere of my activities continued to expand and presently I was known as a banker. Actually I had been doing the same thing all the time." In fact, he was all the time taking risk in his business. Banking is a business of risk taking. The successful banker must combine and control the elements of risk within himself.

Let me now turn to a subject that has been in my mind for a long time. That is, corporate governance in the banking industry. Lest my comments be misinterpreted, let me hasten to say that I am not projecting any downturn in the Mauritian economy

Mauritius has enjoyed a healthy economic growth for several years and the future looks promising. Our banking sector has fully participated in our economic fortunes and has experienced a rapid growth. Sometimes I feel the growth has been too rapid. But as business practitioners, we have to recognise that each country has economic cycles. We need not have to go very far back in time to find that out. Just think of what has happened recently in South America and Asia. Japan, the second mightiest economy in the world, has faced devastating circumstances. Some of its highly reputed, powerful financial institutions fell victim to the economic downturn and became insolvent. I don’t need to tell you that this bears out a good lesson for all of us.

Prudent bank management demands that we should continually ask ourselves how would we be able to survive the impact of macroeconomic shocks. Suppose the level of non-performing loans doubles, which I must say is not an event unheard of, will our institutions have sufficient capital and other strength to cushion the shock? Good corporate governance demands that management should conduct this type of vulnerability examination from time to time.

As supervisors, we, at the Bank of Mauritius, will certainly be asking you the following questions : what controls and processes have you in place to assess your vulnerabilities? What steps will you take to cushion your institutions from shocks

I wish to leave a message for your board of directors. Never stretch your foot beyond the length of your blanket. Often, it is the Board of Directors that fails, not the management. Board of Directors must recognise that in the end, they are the ones that have the final responsibility for avoiding vulnerability of the institution to shocks and of ensuring its continuing soundness. We must also look to them for good governance.

John Maynard Keynes once said, ‘It is a good thing to make mistakes so long as you are found out quickly’ The importance of the role of external auditors in the banking industry in Mauritius is often underestimated. Auditors, too, are accountable. Your profession is of interest to me in many different ways but I wish to seize this occasion to touch on only one aspect : that is, the relationship between the audit of a financial institution and its supervision by the central bank.

Let me first recognise the important contribution your profession is making to the well being of our financial system. The presence of several international firms in Mauritius, with a wide experience in the field of bank audits, is indeed a healthy development.

External audit is a critical element in the corporate governance of a financial institution. That is well recognized in the Banking Act. We also recognise that the perspectives of the auditor and the supervisor in the assessment of an institution may be somewhat different. While the auditor focuses primarily on attesting to the fairness of financial statements, the supervisor is additionally interested in continuing protection of its depositors; in other words, the supervisor takes a futuristic perspective. I do, therefore, appreciate that the scope of your audit may not address all matters that are of interest to us. Nevertheless, I must state in no uncertain terms that your audit provides a building block for the central bank’s examinations of institutions. We rely on your work but of course only after having satisfied ourselves that we can place reliance.

I am sure that you do appreciate that the supervisor does not have the resources and budget to do as comprehensive a review of the records and practices of a bank as an audit would, albeit from a somewhat different perspective. Indeed it would be wasteful to duplicate the effort and not rely on your work.

I believe that we should seek co-operation of financial institutions and further consolidate this important relationship between us. We must indeed work together to ensure the soundness of our financial sector. It will be in our mutual interest to continue with the dialogue that I have already initiated.

Ladies and Gentlemen, 1998 is drawing to a close. Without any further comment from me, may I, on behalf of the Board of Directors and the staff of the Bank of Mauritius and on my own behalf, wish you all a merry Xmas and a prosperous New Year.

 

 

 

Bank of Mauritius

18 December 1998

 

 

APPOINTMENT

 

Mr. Baboo Rajendranathsing Gujadhur, former Director-Banking Supervision, was appointed Managing Director of Bank of Mauritius with effect from 17 December 1998.